Addressing threats to health care's core values, especially those stemming from concentration and abuse of power. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.

Sunday, July 17, 2005

Rhode Island Blue Cross Settles Class-Action Lawsuit

Our own Rhode Island Blue Cross just settled a class-action lawsuit, according to the Providence Journal. The plaintiffs had claimed that Blue Cross collected inflated inflated co-payments for drugs by charging patients a percentage of the list price, while the company actually was only charged a discounted price. The example given in the article was someone "might, for example, get $100 in perscriptions ... and end up paying $20, based on a 20-percent copayment, while Blue Cross would secure discounts and pay just $40 for that medication." Although Blue Cross did not admit wrongdoing, the settlement would prevent it from basing co-payments on inflated list prices in the future.
Blue Cross was not exactly forthcoming in this matter. The plaintiff's lawyer described its defense of this lawsuit up to the time it was settled as "trench warfare."
This is, of course, yet another example of a insurance company/ managed care organization "bilking subscribers," to use the article's words. More importantly, it also appears to be an example of how mismanaged health care organizations end up hurting the patients they are supposed to serve. At the time Blue Cross was inflating patients' copayments, it was lead by a CEO who turned out to have an equally inflated salary, received an interest free loan from Blue Cross to help finance a lavish new house, and be getting free treatments from a local acupuncturist who hoped to get the company to start paying for his services (see our post here). In addition, Blue Cross is currently being investigated after a state legislative leader revealed they he accepted money from the company to promote its legislative agenda (see our post here).

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